Employees & services are their biggest expenses.Building commercial & residential buildings in Croatia.In my view, they are a capital-light companyFrom asset_heavy (wrong type): ROIC is important. Net income is a lie.Correct metrics to focus on: Rule of 40 (Growth + FCF Margin).1. Management is satisfied with the backlog:67% is heritage restoration33% is residental and commerical buildingsThere is a dominant share of public clients. (risk)?“We are particularly pleased that revenue growth is accompanied by a satisfactory levelof profitability, despite accelerating cost pressures, inflationary headwinds and global supply chaindisruptions. “profitability check.Operating margin: 2025: 2024:15.65 15.02Net margin:2025: 2024:13.12 12.23Let’s now take a look at the cost structure:growth Y/Y:Cost of raw materials and consumables (6,233) (4,601) 35.47Service expenses 6 (115,267) (82,361) 39.95Employee expenses 7 (12,061) (12,127) -0.54 Depreciation and amortisation (2,072) (1,979) 4.69Other operating expenses 8 (3,940) (3,796)Impairment of financial assets (3) -Ing Grad ROIC verdict:2024:ROIC: 88.74%WACC: 7.63%2025:ROIC: 38.99%WACC: 9.00%verdict:1.NOPAT growth = (20699 − 14858) ÷ 14858 = 39.31% = Engine2.Average invested captal growth = (53095 − 16744) ÷ 16744 = 217% = fuel3.Let’s check current assets: 2025 2024Other investments 63,339 11,616 = 445%Contract asset 9,245 8,296 = 11.43%Inventories 474 349 = 35.81%Trade and other receivables 17 32,955 39,879 - decreaseAsset held for sale 111 912 - decreaseCash and cash equivalents 18 16,513 3,662 = 350%Highest capital increases:Other investments, Cash & Trade and other receivablesWhat does this mean?===========================================================WARNING: this is before I took out the excess cash===========================================================Other investments“Investments in equity securitieses relates to investments the Company has in publicly listeden!!es, and for which do not meet the criteria for classification as either amor!sed cost orFVOCI.Loans given relate mostly to loans given to employees with annual interest rate from 2% to5%.Deposits with commercial banks are given with annual interest rates from 1.95% to 2.08% andmature in less than 6 months.Other investments relates to investments in low-risk money market funds.”:2.11. InventoriesInventories of commercial goods and raw materials are valued at the lower of cost, using theweighted average method, or net realizable value. Net realizable value is the es!matedselling price in the ordinary course of business less the es!mated cost necessary to make thesale. Cost includes expenditure incurred in acquiring the inventories and bringing them totheir exis!ng condi!on and loca!on decreased by any discounts received. The value of slowmoving and obsolete stock is reduced and charged to the current year profit or loss.”The company is overspending for its growth.ADDING EXCESS CASH: 2025 2024 2023Current investments 63,339 11,616 4,445cash: 16513 3662 28476total cash: 79852 15278 32921This actually resulted in:2024:
ROIC (Avg IC)
170.53%
N:14858 / D(Avg):8713
WACC
7.63%
Kd(Avg):6.12%
2025:
ROIC (Avg IC)
132.54%
N:20699 / D(Avg):15618
WACC
9.00%
Kd(Avg):2.29%Correct ROIC verdict:1.NOPAT growth = (20699 − 14858) ÷ 14858 = 39.31% = Engine2.Average invested captal growth = (15618 − 8713) ÷ 8713 = 79.24 = fuelThe situation is very similar; although right now, I can see that their fuel need is lowe,r but tsill 2x their engine capacity - that still signals overspending. They need to slow down, oetrhwise ROIC will continue to fall.But is this a high-quality company then? Absolutely. A ROIC of 132.54% is almost unheard of. Management just needs to stop burning cash and the company will generate more cash - they just need to stop for a bit.Ing Grad D.D. ROICI have an issue with ineterst expsne - which one to choose??Debt:Non-current liabilities: 2025 2024 2023Lease liabilities 21 (2,561) (1,068) (1,383)Current liabilities:Lease liabilities 21 (809) (436) (667)Loans and borrowings 22 - (8,334) (76)total debt: 3370 9838 2126NIBCL:some might be restated so I’m worried about accuracy. 2025 2024 2023Provisions 20 (1,455) (1,748) (1,813) Acrued espenses?Contract liability 16 (9,390) (12,258) (8,907) Accounts payable?Income tax payable (1,697) (1,639) (1,589) Accrued expensesTrade and other payables 23 (24,621) (21,423) (10,872) Accounts payable (it has acrued expenses, in the from fo worker compensation) 2025 2024 Deferred income 9,390 12,258 unsure about accuracy, due to restatemnt possiblity not being enforced here:2025:1,455+9,390+1,697+24,62137,1632024:1,748+12,258+1,639+21,42337,0682023:1,813+8,907+1,589+10,87223,181Interest expense: 2025 2024Finance costs (151) (366)WARNING:The cash flow statemnt only shows PAID items, not incurred ones.I found thsi on reddit:It’s exactly as you say it. Interest expense is a non operating income statement item but an operating cash flow under GAAP. Under IFRS it can be an operating or financing cash outflow.Statement of cash flows (WRONG PLACE): 2025 2024Interest expense 9 111 360Warning: I made a mistake earlier regarding deferred income - Contract liability is the same term, only using diffrent words!Deffered income 2023:8,989,420 They only had an XHTML document, which had group and company data, so I used the group data.changed to:8989.420Fy 2024 Ing Grad D D Nabzdyk Ratings Excess Cash Added12.5KB ∙ PDF fileDownloadDownloadNext up - Phase 2, 3, 4 & 5 - will this company survive?If you become a Founding Member of the NabzdykRatings Software today (€9/mo), I will manually grant you Premium Access to this Substack for free.Become a founding member